Primary care can extinguish fee-for-service, study says

October 15, 2014

A new report suggests that primary care can phase out fee-for-service models by incorporating multiple healthcare teams, diverse pay models and technology.

It’s no secret that primary care is becoming more important to the healthcare landscape. Provisions of the Affordable Care Act (ACA) are expected to add 25 million primary care appointments annually. In order to lower costs and make primary care more accessible as more people seek healthcare, UnitedHealth Center for Health Reform & Modernization and Optum Labs released a report recommending that states the solution lies in phasing out fee-for-service models and incorporating multiple healthcare teams, diverse pay models and technology.

“As much as half of wasteful health care spending results from failures of care delivery and care coordination, as well as overtreatment - all of which could be improved by moving away from the fee-for-service reimbursement model,” the report states.

Efficient and easy-to-find primary care services also contribute to the decrease in emergency department visits. Nearly 70% of emergency department visits by insured patients are for non-emergency issues, according to the report.

The report suggests policies and regulations that increase roles for nurse practitioners (NPs) and physician assistants (PAs), thereby making primary care services more attainable and affordable for people living in medically underserved communities. “In the 10% of local markets with the lowest concentration of primary care physicians, the concentration of NPs and PAs was highest, and there were approximately equal numbers of physician and non-physician providers,” according to the report.

Reimbursement models would have to be reconfigured to incentivize practices to use NPs and PAs for less-complex patients. “A significant barrier to achieving more dramatic and rapid progress is payment policy. Medicare and Medicaid generally reimburse less for services delivered by NPs and PAs than for the same services when performed by physicians.”

Offering different types of services tailored to patients’ needs also will help primary care practices transition to value-based payment models and increase patient satisfaction. The study suggests:

  • retail- or urgent care-structured services offered after hours to cut emergency department visits;

  • house calls to patients to evaluate social and environmental factors that can affect health;

  • group visits with private exams and collective educational classes; and

  • using primary care physicians to focus on “super-users”-5% of the population who account for 50% of healthcare costs.

The report finds that too many barriers remain in healthcare technology to allow primary care physicians to use it to their advantage. Lack of interoperability between EHR systems, training, maintenance costs and loss of productivity all make utilizing technology difficult. “Investments in the deployment and impactful use of HIT require significant time commitments and upfront costs that will pose difficulty for some primary care practices,” the report says.